Chinese internet giant ByteDance Ltd. reportedly prefers to shut down its popular video-sharing platform TikTok in the US should it fail to prevent Washington’s ban.
Four sources familiar with the matter stated that the Beijing-based company has low expectations of being able to sell the US assets short-form video platform with algorithms as the feature, which tailors suggested videos for users, is integral to the firm’s overall operations.
Such a move is also impossible, as the intellectual property license of TikTok and its algorithms is said to be listed under the social media firm in China, which could turn the split into an arduous process.
Furthermore, the TikTok parent would rather discontinue the app in the US if it loses the legal battle, considering the platform only represents a small share of its total revenues and daily active user base.
A separate source said the US represented around 25% of TikTok’s total revenues in 2023.
Shutting down TikTok seems to be the better option for ByteDance, according to the sources, as it would not significantly impact its business, and the company would not need to sell its proprietary algorithm to an interested US buyer.
The firm has declined to comment on the report, which came after it dismissed news on Thursday that it was looking into selling TikTok in the US without algorithms.
US TikTok Ban Bill Might Deter China’s Alleged Surveillance
US President Joe Biden signed into law on Wednesday a measure that would push ByteDance to divest TikTok or face a total ban in the country.
The bill was brought forward in Washington as TikTok, notably its algorithms, raised concerns among US lawmakers.
Officials have argued that the video-sharing app’s algorithms may be used to let third parties in China access US users’ data or be used as a means of surveillance, thereby threatening the US’s national security.
For years, US lawmakers have expressed their worries about Chinese authorities possibly instructing the privately owned internet giant to surrender US users’ private information or sway them by withholding or endorsing specific content on TikTok.
With the legislation signed, ByteDance now has nine months, or until January 19, to decide whether to sell TikTok. The company might also receive a three-month deadline extension if it proceeds with a sale.
TikTok Chief Executive Shou Zi Chew stated on Wednesday that they expect to prevail over the legal fight to deter the new law, which could see the app’s 170 million users in the US no longer be able to access its platform.
